Call of the German logistics

Logistics is an integral part of the auto industry. Even more important is to have the right logistics partner.

Logistics has become the need of time. Most manufacturers and traders, big or small need the muscle of logistics companies to ferry their goods – to bring in raw material and machinery, and to carry the finished products. It is no different with the automotive manufacturers. As global as any industry can be, logistics plays an important role in the functioning of an automobile industry. Especially when diverse markets as well asexports need to be catered to.

With auto exports to Europe on the rise, the Logistics Council of Germany is wooing India’s automakers like never before. Speaking to a select group in Mumbai recently, Jan Heitmann, CEO of Logistics Council Germany GmbH, said India and Germany are moving closer. Stressing on trade between the two countries increasing to Euro 14 billion between 2004 and 2008 in India, Heitmann stated that the same could increase to Euro 20 billion by 2012. “Over Euro 3 billion have been invested in India by German companies and the auto companies are at the forefront,” Heitmann added.

Pointing at the export of 230,000
vehicles from India, an increase of 7 per cent, Heitmann drew attention to the fact that India was emerging as a leading auto player in Asia. With a good chunk of India’s auto exports going to Europe, maritime management and custom formalities have assumed importance, he added. The fact that the auto industry has the most stringent logistics needs where parts have to reach the assembly line in time, and the need for an understanding logistics partner emerges. Something, which, German logistics companies are good at according to industry experts. The experts point at Germany as world’s centrally located, high performance logistics hub, which earned logistics revenues in excess of US$ 326.1 billion in 2008.

Supported by high level of industriali-sation, central location and an outstanding infrastructure, Germany, according to Heitmann, despite recession, continues to be strong. Germany’s logistics sector is the third vivid sector in Germany and has shown strong growth overtime. In the heart of Europe, Germany borders with 10 nations. This gives it a distinct advantage. Thus, in 24 hours every nation in Europe can be reached.

Describing his organisation as a non-profit initiative, and a joint venture between the Federal Government of Germany and the logistics companies, Heitmann explained that his company was into provision of international service platform for German logistics providers – the auto sector being one of it. Asked why Germany could be favoured of all the other European nations and Heitmann pointed out that Germany is in the thick of the European business and logistics region with a turnover of US$ 1.4 trillion in 2008. “With key industries like automotive, chemicals, pharma, computers, renewable energies, aerospace, mechanical and plant engineering, wood and furniture, optics and medical engineering, textiles and consumer electronics, Germany has a strong multimodal infrastructure,” he added. This is aptly reflected by the fact that, the German infrastructure consists of 231,00 km of motorways and major trunk roads that support the transportation of more than 3 billion tonnes of goods each year and accounts for the largest share of cargo traffic. Approximately 7,500 km of in-land waterways support transportation of up to 250 million tonnes of goods each year. The rail network of 41,500 km supports transportation of approximately 360 million tonnes of goods each year whereas the air services linked with most destinations in the world support more than 3 million tonnes of particularly high-quality and perishable goods transportation every year. Transportation of approximately 312 million tonnes of goods in Germany is through a strong network of ports on the North Sea and the Baltic Sea.

Suggesting that Indian companies looking for logistics partner could link with the Logistics Council Germany for match-making, Heitmann remarked that German logistics companies are investing in India and offer innovative solutions. Emphasizing their intention on joint action, Heitmann reiterated that Germany is an important transit point for logistics, and with a lot to offer as a gateway to Europe. He pointed at Mosolf, the logistics company, which according to Anand Singh, chief executive officer of Transport Solutions India, focuses on car transportation and heavy transportation.

A joint venture between Horst Mosolf GmbH & Co. KG and Transport Solutions India (TSI), Mosolf is the official releasing agent for Volkswagen India, and successfully completed the start-up phase recently. Having logistics centers in India, China and South America, the company has more than 40 subsidiaries. Equipped with a fleet of 800 car carriers and 300 double deck carriers in Germany, the company as a logistics partner offers multi-brand storage and hub areas in addition to providing value added services. Speaking to APF, Anand Singh stated that in India, his company has just started operations and would be investing in car carriers. He added that today each automaker has his own logistics affiliate. This could soon give way to multi-brand loading and multi branding in an effort to increase efficiency and optimise costs.

Mosolf, according to Singh, offers PDI and testing services to automakers. The technical services are an extension of OEM, quite often, entrusted due to lack of the lack of volume. Further explaining the nature of business under taken by his company, Singh explained that in Brazil almost 80per cent of the logistics for Honda Motorcycle are done by them. “We offer integrated solutions by undertaking OEM requirements in terms of stability, flexibility and the infrastructure”, Singh explained further: “We take pride in yard compound management and auto logistics. Different regions have localised requirements. We offer that through flexible solutions”. From what Singh has to explain, it is not surprising to find a logistics partner of an automaker turning into its integral part. An integral part of customers’ manufacturing facilities, presenting him with cost effective solutions.